Dubai economy is growing at 5pc

DUBAI: The Dubai economy is growing at a five per cent rate, less than in previous years but ahead of the most cautious forecasts, the head of a government economic committee said yesterday.

"Yes we are affected by what is going on in the world but we are confident about the stability of the city," Mohammad Alabbar, also chairman of construction giant Emaar, told a World Economic Forum conference in the emirate.

"Last year we were all in the eye of the storm. The past 12 months have been quite painful," he said.

"GDP growth is now 5pc. We used to have a growth of 14pc, so this isn't bad news, but it's not as good as before," said Alabbar, whose committee is tasked with helping Dubai counter the impact of the global economic crisis.

The International Monetary Fund has predicted GDP growth of about 3.5pc this year for the UAE, down from the 7.4pc achieved last year.

Alabbar denied reports of a mass exodus of expatriate workers.

In the last 12 months "400,000 people have come to live in Dubai," he said, while refusing to put a figure on the number who have left.

Alabbar said an announcement is likely in the next few days on the proposed merger between Emaar and other state-linked companies, Dubai Properties, Sama Dubai and Tatweer.

Last month Emaar announced that it swung to a net profit of 655m UAE dirhams ($178m) in the third quarter from a loss of 1.285 billion dirhams ($350m) in the three months to June.

The Dubai property sector was badly affected by the international crisis, as property prices plunged by 50pc from their peak.